Melbourne City is constructing a new office building of about 580,000 square meters. About three-quarters of the space has been pre-allocated to tenants. When the remaining part is added to the growing backfill pool, about 320,000 square meters are looking for new Of the residents, about 15% of them have been confirmed to sign.
Michael Cook, head of real estate at Investa Group, the office’s fund manager, said that incentives (discounts that allow potential tenants to sign up) will not reach such high levels. He said: “My instinct is that the incentives will not be more than 20 years old for Sydney’s customer base. If Melbourne’s incentives reach that level, there will be problems with the rent or development equation.” Mr. Cook said the office development The business was not in financial trouble. “This is a health crisis, not a financial crisis. The predicament is more in terms of tenants, and it is easier to manage.”
With the reopening of domestic travel, the trading activity of the office sector will start to rise again, and will begin to take off after the restoration of international travel. Nearly half of all office assets sold in the past decade were purchased by offshore capital.
